SEEU Review vol. 5 Nr. 2 (pdf) - South East European University

SEEU Review Volume 5, No. 2, 2009
Luca Papi (2005) tried to define different aspects of the central bank
independence. He defined the political independence as the possibility of
central bank to fulfill independently from the political authorities the
delegated objectives 2 . The main elements of political independence are the
institutional 3 , objectives 4 and instruments independence 5 . Instruments
independence is made up of two components: operational independence 6
and financial independence 7 .
The last kind of independence is related to the operational independence
are: regulative independence 8 and surveillance independence 9
Independence of South Eastern Europe central banks and
European integration
Central Bank independence is especially important for the countries that
want to access the European Union and the European Monetary Union
because they have to meet certain criteria that guarantee the independence of
their central banks.
Preconditions for European Monetary Union integration are: functional
independence of central bank, institutional independence of central bank,
personal independence, financial independence, independence in the central
bank budget preparation, and the non – financing of the state budget. Further
adoptions, according to Article 109 of Maastricht Tractate for total legal
integration in Euro system, deal with the adjustment of monetary policy
instruments, with foreign currency reserves management and preservation,
etc.
The main objectives of South Eastern Europe central banks generally
match the Maastricht criteria; the main objective of most of the central banks
is price stability. So we can say that most of the central banks have achieved
the functional independence.
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3
4
5
6
7
8
9
Papi referred to both vertical and horizontal aspects of delegated attributes.
Bakas gave the same definition as Papi for this type of independence
Central bank is the authority that determines its own priorities through the selection of the objectives.
This definition is closely related with the concept of operational independence
This is the first rule of Basic Principles of the Committee of Bazel for an effective banking supervision
Bakas gave the same definition as Papi for this type of independence
It defines the possibility to draw regulation and procedures for the financial sector.
This type of independence guarantees the sustainability and stability of financial sector. It includes leasing,
regulative supervision, licensing and revocation of licenses, and crises administration
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